Financial institutions are falling significantly behind other retail services. While customers are accustomed to hyper-tailored suggestions on their next online purchase or food order, banks and credit unions struggle to surface relevant product offers or personalized communications.
Plus, FIs aren’t just competing amongst themselves anymore. With companies like Google and Apple, who have mastered personalization, entering the scene, the competition has grown exponentially. So how can banks and credit unions stand out in a crowded market to deliver services that truly resonate with their clients?
According to the World Retail Banking Report, consumers expect their financial institutions to provide personalized experiences that are value-based and seamlessly integrated into their lives. However, the report also reveals that nearly half of the respondents feel that their banking relationships lack the emotional connection and integration they desire.
44% of customers express that their banking experience lacks personalization. David Nohe, the CEO of FinGoal states, “It's true that if you're not paying attention to your customers and their data, you're not paying attention to your customers, full stop. And if you're not paying attention to your customers, you will not survive.”
But despite consumer demands for personalization dating back over a decade, financial institutions continue to send mass emails that are irrelevant to a large population of recipients. They use generic banners to promote one or two products to all customers regardless of need. These marketing techniques are not only outdated, but they loudly broadcast to consumers that their bank is not listening.
For financial institutions to win in this digital era, they must leverage consumer data. The transaction data, banks already hold, provides a multitude of insights. It indicates shifts in your customers’ needs, highlights changes in spending behavior, and signals readiness for additional financial products.
Ariam Sium, VP of Product at FinGoal states, “With so much competition in the space, it's really important to not only differentiate yourself as a financial institution, but to remind your members why they chose you. And the best way to do that is to show that you care about them as an individual. Remind them that they aren't just one of many. Use the data that you have in front of you. Build a better experience for them, from in-person experiences to the offers you're serving up. Because the more wallet share you gain, the more likely you are to have customers for longer.”
To remain relevant in the financial sector, it's imperative for banks to shift their focus away from short-term marketing triumphs and towards enduring drivers of growth. In this regard, FinGoal's Next Best Actions offer a compelling solution for financial institutions.
“Next Best Actions by FinGoal provide insight into who your users are and what's important to them, and it’s all based on the transaction data FIs already hold. By leveraging that data, we're able to learn about user spending habits, the types of merchants they frequent, and determine what is important to them. Then, we can create personalized offers that are targeted to each individual user, based on their real-time needs and lifestyle choices,” explains Sium.
If financial institutions continue to ignore the mound of data they’re sitting on, customers will simply leave and find a banking solution that knows and honors their needs. But when used properly, banks and credit unions can use transaction data to increase conversion rates, boost customer loyalty, and grow customer satisfaction.
In fact, FinGoal guarantees that when you partner to deliver Next Best Actions, your organization will see an increase in conversions of at least 30%, in the first 90 days, or your money back. Sium explains the guarantee further, “Because we've been around and doing this long enough, we are confident in the results we can provide. So much so that we want to put our money where our mouth is, and guarantee that success.”
The era of personalized experiences is well established, and complacency is no longer an option for banks. Failing to harness this data not only leads to customer attrition but also communicates a stark lack of care and engagement. Such negligence carries a clear outcome - a gradual slide into obsolescence.
Capco's study underscores that 72% of customers highly prioritize personalization in today's financial services landscape. But according to IBM, only 30% of customers believe they are currently receiving a personalized customer experience, indicating a significant gap between expectations and reality.
The message is clear: to remain relevant and thrive, financial institutions must adapt swiftly to meet the evolving personalization demands of their customers, or risk being left behind in the fast-paced digital age.
To learn more about FinGoal’s Next Best Actions, click here.